NCLAT: Law Min advises against appointment of ex-SC judge Radhakrishnan

The Ministry of Corporate Affairs’s plan to set up a National Company Law Appellate Tribunal (NCLAT) has run into rough weather, with the Law Ministry advising it against doing so at this juncture.

In legal opinion given sometime back, the Law Ministry shot down the proposal to appoint recently retired Supreme Court judge K S Radhakrishnan as the first chairperson of NCLAT. The Law Ministry also advised against appointing two judicial members to the yet-to-be constituted Tribunal, which is a statutory requirement under the new Companies Act.

Justice Radhakrishnan’s name was recommended for the post by the previous Chief Justice of India P Sathasivam almost two months before his (Justice Radhakrishnan’s) retirement on May 15. The chairperson of NCLAT has to be a person who is, or has been, a judge of the Supreme Court or the Chief Justice of a High Court.

The reason given by the Law Ministry for its objection is straightforward: How can you constitute an appellate tribunal when the National Company Law Tribunal has not been established?

The NCLAT would hear appeals against orders passed by the National Company Law Tribunal, which, in turn, would hear and decide all matters earlier decided by the Company Law Board, Board for Industrial & Financial Reconstruction (BIFR), and winding up cases in various high courts.

The Law Ministry also told the MCA that the president of the National Company Law Tribunal can be appointed only after a suitable name is recommended by the Chief Justice of India.

The MCA had a few months ago invited applications for the posts of judicial members in the National Company Law Tribunal, but the appointment process was put on hold due to a writ petition filed in the Supreme Court.

Justice Radhakrishnan was part of the bench that ordered the jailing of Sahara group chief Subrata Roy and two other directors. Roy is still in jail.

After retirement, the judge had claimed there was “pressure, tension and strain” on him and his family during the hearing of the case.